The Advocate General of the European Court of Justice today gave his opinion on three cases concerning Google’s AdWords system, which permits advertisers to purchase third-party trademarks as keywords to trigger sponsored links in search results. The opinion is not binding on the ECJ, but the court often follows the Advocate General's opinion in the majority of cases. The three cases encompassed by today’s opinion are: Google France v Louis Vuitton, Google v CNHRR and Google v Viaticum Luteceil, (Joined Cases C-236/08, C-237/08 and C-238/08).
These cases were brought to address on a large scale issues frequently confronted by brand owners in their efforts against counterfeiters. Specifically, counterfeiters frequently purchase keywords from Google that correspond to registered trademarks such as “Louis Vuitton. ” When an Internet user searches for “Louis Vuitton,” this triggers advertisements in Google’s search results that redirect consumers to websites where they can purchase counterfeit merchandise (e.g., “Louis Vuitton Replica” and “fake Louis Vuitton handbags”). The Advocate General’s resolution of the questions posed to the ECJ is bad news for trademark owners.
These cases had originally been filed in French courts, which then referred a number of questions to the ECJ, including whether use of a mark by an internet search engine in return for a payment (e.g., Google's AdWords system) constitutes trademark infringement under Article 5 of the First Trademarks Directive (89/104/EEC) and whether trademark owners are entitled to prevent the sale of trademarks as keywords. It also sought guidance on the defences available to internet service providers under Article 14 of the E-Commerce Directive (2000/31/EC) - that they are acting as “a mere conduit”.
In today’s opinion, the Advocate General said that Google is not infringing a trademark by permitting advertisers to select keywords corresponding to trademarks on the grounds that such selection is not use in the form of a sale of a product or service to the general public. This use is not a use made in relation to goods or services identical or similar to those covered by the trademark under Article 5 of the First Trademarks Directive. The same argument applies to advertisers who select keywords corresponding to trademarks.
The Advocate General also said that internet users are aware that other sites, not just the rights holder's site, will appear in search results. Internet users' access to information concerning the trademark should not be limited to or by the mark owner even if the mark at issue has a reputation.
He rejected arguments that Google's actual or potential contribution to a trademark infringement by a third party should constitute an infringement in itself, concluding that mark owners would have to refer to specific instances giving rise to Google’s liability in the context of illegal damage to their trademarks.
The decision’s focus was somewhat different from U.S. decisions on this issue. Importantly, the ECJ’s decision held that “the mere display of relevant sites in response to keywords is not enough to establish a risk of confusion on the part of consumers as to the origin of goods or services.” In the U.S., most courts have focused on the possibility of confusion caused by the content of the triggered advertisements. For example, under the facts here, U.S. courts may have placed more emphasis on the use of the trademark owner’s name in the display ads.
Despite these differences, there are a number of parallels in the ECJ decision to issues that frequently arise in U.S. trademark infringement cases. The ECJ’s inquiry of whether there has been a “use that takes place in the course of trade” is analogous to the threshold “use in commerce” question that until very recently divided U.S. courts. Unlike U.S. courts, which are in general agreement that both the purchase and sale of keywords are “uses in commerce,” the ECJ distinguishes between the conduct of Google and that of Google’s customers. Namely, Google’s sale of such keywords is “in the course of trade,” whereas the purchase of such keywords is a “not a commercial activity, but a private use.” The ECJ also declined to recognize the U.S. concept of contributory infringement, rejecting “the notion that the act of contributing to a trade mark infringement by a third party . . . should constitute an infringement itself.”
This decision is a blow for trademark owners in the EU in that it will, if followed by the ECJ, result in brand owners having to specifically prove loss in order to succeed in any action for trademark infringement. This may be possible in some cases but will make bringing actions all the more difficult.
- Simon Bennett, Brent LaBarge, and Suzanne Wilson
